The U. S. Departmentof Energy's Fuel Economy Guide provides fuel efficiency data for cars and trucks. The data set below contains data for 311 compact, midsized, and large cars. The Class column identifies the size of the car: Compact, Midsize, or Large. The Displacement column shows the engine's displacement in liters. The FuelType column shows whether the car uses premium (P) or regular (R) fuel, and the HwyMPG column shows the fuel efficiency rating for highway driving in terms of miles per gallon. Develop the estimated regression equation that can be used to predict the fuel efficiency for highway driving given the engine's displacement, the class of automobile (compact, midsize, and large), and the fuel types. How much of the variation in the sample values of HwyMPG does this estimated regression equation explain?
For the estimated regression equation developed in part (e), test for the significance of the relationship between each of the independent variables and the dependent variable using the 0.05 level of significance for each test.
An automobile manufacturer is designing a new compact model with a displacement of 2.9 liters with the objective of creating a model that will achieve at least 25 estimated highway MPG. The manufacturer must now decide if the car can be designed to use premium fuel and still achieve the objective of 25 MPG on the highway. Use the model developed in part (e) to recommend a decision to this manufacturer.